GE pushes deeper into wind power, buying Danish blade maker

General Electric Co. plans to buy a maker of wind-turbine blades for $1.65 billion, bolstering the renewable-energy business that has become a central focus of the industrial giant.

Acquiring Denmark-based LM Wind Power -- maker of the blades mounted to the GE turbines of the Block Island Wind Farm -- would enhance GE’s ability to serve customers in the onshore and offshore wind markets, the companies said. GE plans to operate LM Wind Power, which is owned by private-equity firm Doughty Hanson, as a standalone business within the renewable-energy unit.

Boston-based GE is rushing to meet global demand for clean energy sources as falling costs make renewable power more competitive with fossil fuels. The company, which also has a sizable hydropower business, is one of the world’s leading manufacturers of onshore wind turbines and is trying to build out a complementary offshore operation.

GE made a big statement last year with the $10-billion acquisition of the wind-power division of French conglomerate Alstom, which had already signed a contract to supply five Haliade model six-megawatt turbines to Deepwater Wind's Block Island Wind Farm.

GE Renewable Energy completed the deal, shipping the turbines to Rhode Island and overseeing the final assembly of components at the Port of Providence. The turbines were installed this summer, and the 30-megawatt offshore wind farm -- the first in the United States -- is set to go into operation in the coming weeks.

General Electric disclosed further involvement in the project this week with the announcement that GE Financial Services and Citi had closed on tax equity financing of the wind farm.

“The Block Island Wind Farm is a landmark project in the U.S. renewables market that GE is proud to support with capital investments and advanced wind energy technology," Kevin Walsh, managing director of head of U.S. Renewables at GE Financial Services, said in a statement.

LM Wind, the largest blade supplier to GE’s wind business, has 13 factories on four continents. GE plans to maintain LM Wind’s headquarters and management team. GE said it would maintain its ability to source blades from other companies.

The acquisition is valued at 8.3 times earnings before interest, taxes, depreciation and amortization, and should accrete to earnings in 2018, according to the statement. The deal is expected to close in the first half of 2017.

GE has announced several acquisitions over the past two months, including offers for a pair of 3D-printing companies for $1.4 billion and a $495-million deal last month for software developer Meridium Inc.

S&P Global Ratings cut GE’s credit rating Sept. 23 over the possibility that the company would add debt to support possible acquisitions.